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One in Five U.S. Family Offices Has No Succession Plan

By Alex Padalka September 27, 2018

Not all U.S. family offices, despite expecting an imminent generational wealth transfer, are ready to continue managing that wealth, a recent report from UBS and Campden Wealth suggests.

Worldwide, 70% of family offices expect the transfer to occur in the next 10 to 15 years, according to a survey of 311 single and multi-family offices around the world with an average of $808 million in assets.

But in the U.S., only 42% of family offices have a succession plan in place, while 32% are in the process of developing one, the survey found.

And 19% of U.S. family offices say they lack a plan altogether, according to the report. Globally, there’s been only a 1% increase, to 43%, in the proportion of family offices that have a succession plan in place, the report found.

“Recognizing the importance of succession planning with regard to the smooth transition of business ownership and wealth inheritance from one generation to the next, and the accepted wisdom that it traditionally takes up to 10 years to effectively arrange and implement a succession plan, I would strongly encourage families and family offices to remain focused on this important governance priority,” Dominic Samuelson, CEO of Campden Wealth, says in the report.

The next generation of family members seems somewhat ready for the task of taking over the family wealth. Three in 10 hold management positions or executive roles and 23% sit on the family office’s board, according to the report.

Dominic Samuelson

Among families, more prioritize implementing a succession plan (43%) than establishing a family legacy (29%), although that still lags behind other priorities such as communication between the family and the family office, cited by 61% of respondents, and educating family members about the family office, cited by 50% of respondents, according to the survey.